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“Bitcoin’s volatility has dropped to an all-time low, making it more attractive to institutional investors than gold,” JPMorgan said bluntly in its latest research report that the Wall Street giant made it clear that Bitcoin is significantly undervalued relative to gold.
According to JPMorgan Chase analysis, Bitcoin’s six-month rolling volatility has dropped from nearly 60% at the beginning of the year to about 30%, setting a record low.Meanwhile, the volatility ratio between Bitcoin and gold has also dropped to its historical lowest level, and Bitcoin is now only twice the volatility of gold.
Volatility drops sharply, value revaluation is in progress
Volatility has been the main obstacle to the full adoption of Bitcoin by traditional institutional investors.Now this obstacle is quickly disappearing.The JPMorgan analyst team elaborated on the shift in a recent release.
The sharp decline in Bitcoin’s volatility is not only a change in technical indicators, but also a significant increase in market maturity.The report pointed out that the decline in volatility directly reflects the shift in the Bitcoin investor base – from mainly retail investors to dominant institutional investors.
This shift is similar to the effect of central bank quantitative easing on bond volatility.Corporate treasury is playing a role similar to the “Bitcoin Central Bank”, reducing circulating supply in the market by continuously buying and holding, thereby reducing price volatility.
JPMorgan Chase uses a volatility adjustment model to compare Bitcoin and gold in detail.Analysis shows that Bitcoin’s market value needs to rise by 13% to match the value of $5 trillion in gold in the private investment field. This calculated fair value of Bitcoin is about $126,000, which still has a lot of room for growth compared to the current price.
ETF War: An unprecedented capital migration
If the decline in volatility is an inherent sign of Bitcoin’s maturity, then the approval and issuance of spot Bitcoin ETFs are an external catalyst to accelerate the adoption of institutions.This milestone event opened an unprecedented investment channel for ordinary investors and institutions, and directly triggered a “Asset Management Scale (AUM)” competition between Bitcoin and gold.
The latest data from Bespoke Investment Group shows that Bitcoin funds have reached about $150 billion, while gold funds have reached about $180 billion.The gap between the two has narrowed to just $30 billion, showing an astonishing catching-up rate.
From a specific fund level, the world’s largest gold ETF, SPDR Gold Shares (GLD), holds about $104.16 billion in assets, while the first-tier Bitcoin ETF (such as BlackRock’s IBIT) has accumulated about $82.68 billion in just one year.This not only reflects the change in investment preferences, but also confirms the increasing importance of Bitcoin as a member of global asset allocation.
“Bitcoin is becoming increasingly attractive, especially for institutional portfolios. The decline in volatility combined with increased regulatory clarity creates a perfect environment for adoption,” said JPMorgan analysts.
Technical Outlook
After JPMorgan released its report, the price of Bitcoin rebounded slightly, but then fell back.According to TradingView data, as of the time of publication, Bitcoin rose 2.3% on the day to about $113,479, and then fell about 1% to around $112,272.
Senior trader Peter Brandt believes that despite Bitcoin’s recent rebound, to completely get rid of medium-term bearish sentiment, the price must break through the key resistance level of $117,570.
However, from a longer-term perspective, many technical indicators are still pointing to bullishness.Bitcoin’s ability to stay above $110,000 shows that institutional investors are using each pullback to steadily build positions, which has accumulated momentum for the fluctuating upward trend in the coming months.
JPMorgan Chase’s $126,000 goal may be just a new starting point. If Bitcoin continues to maintain its current speed of absorbing institutional funds, the narrative that “digital gold” surpasses traditional gold may no longer be a theoretical deduction, but will gradually become a reality.
